Will sale of postal buildings benefit senator?

Rick Riendeau, who goes by “Old Rick,” wrote to Fact Checker and others this month about plans by the United States Postal Service to sell off property.

The Carson City resident correctly noted that much of the postal service’s financial woes can be tied to unusual requirements imposed by Congress.

For instance, in 2006, it mandated that health coverage for postal retirees be paid now to cover needs 75 years into the future.

Old Rick wrote, “I got a letter from Corporate Representative Mark Amodei, the member of the House from Northern Nevada, who said that the USPS just has too many financial problems to be saved.”

This topic was covered in a 2011 Fact Checker column — which found the problems were not difficult to solve if Congress wanted to fix them — but Old Rick adds a new charge:

“Now it can be seen that (Sen.) Dianne Feinstein (D.-Calif.) has figured out a way to benefit from the financial woes of the USPS. Her husband is going to be the Realtor to sell off USPS buildings/property. She and her husband stand to make another fortune off the demise of the constitutionally founded USPS — Article I, Section 8, BEFORE the army and navy are established. Both senators and representatives are violating their oaths of office — to support and defend the Constitution.”

Madeleine Stevens, with Eugene Kiely, of FactCheck.org recently looked into a viral email making similar claims. Here’s what they found:

By Madeleine Stevens / FactCheck.org

Q:Does Sen. Dianne Feinstein’s husband, Richard Blum, own a company that has an exclusive contract to sell United States Postal Service property?

A:Blum has an interest in the CBRE Group, which won a competitive contract to sell postal properties. He is chairman of CBRE’s board and owns an investment firm that holds less than 5 percent of its stock.

FULL QUESTION

Is this true?

All In The Family

The US has entered into a contract with a real estate firm to sell 56 buildings that currently house U.S. Post Offices. The government has decided it no longer needs these buildings, many of which are located on prime land in towns and cities across the country.

The sale of these properties will fetch billions of dollars and a handsome 6% commission to the company handling the sales. That company belongs to a man named Richard Blum. Who is Richard Blum you ask?

Why the husband of Senator Dianne Feinstein, that’s who. What a bunch of crooks we have running this country!

Senator Feinstein and her husband, Richard Blum, stand to make a fortune. His firm, C.R. I., is the sole real estate company offering these properties for sale. Of course, C.R.I. will be making a 6% commission on the sale of each and every one of these postal properties.

All of these properties that are being sold are all fully paid for. They were purchased with U.S. taxpayers’ dollars, and they are allowed free and clear by the U.S.P.S. The only cost to keep them is the cost to actually keep the doors open and the heat and lights on. The United States Postal Service doesn’t even have to pay property taxes on these subject properties. Would you sell your house just because you couldn’t afford to pay the electric bill?

Well, the Post Office is.

How does a powerful U.S. Senator from San Francisco manage to get away with such a sweet deal?

A powerful United States Senator’s husband is standing by, all ready to make millions from a U.S. taxpayer funded enterprise.

No one in the mainstream media is even raising an eyebrow over his 6% commission on the sale of hundreds of millions of dollars’ worth of quasi-public assets.

Pass this info’ on before it’s pulled from the internet.

FULL ANSWER

It is true that Richard Blum has a financial relationship with the real estate firm contracted to sell United States Postal Service properties. However, this viral email gets some details — including the name of the real estate company — wrong.

The email suggests Feinstein — described as a “powerful U.S. Senator from San Francisco” — misused her office to secure a “sweet deal” for her husband. But there is no evidence of that.

Sue Brennan, a Postal Service spokeswoman, told us in an email that seven firms participated in a competitive bidding process. She said the Postal Service chose CBRE Group because it “was the contractor with the best overall organization, capability and experience.”

Feinstein’s spokesman, Brian Weiss, addressed questions about the contract in a February 2013 article in the San Francisco Chronicle:

San Francisco Chronicle, Feb. 8: “Sen. Feinstein is not involved with and does not discuss any of her husband’s business decisions with him. Her husband’s holdings are his separate personal property. Sen. Feinstein’s assets are held in a blind trust. That arrangement has been in place since before she came to the Senate in 1992,” said Brian Weiss, Feinstein’s communications director.

To require the Postal Service to consider the effect of closing or consolidating a postal facility on the ability of the affected community to vote by mail and to provide for a moratorium on the closing or consolidation of post offices and postal facilities to protect the ability to vote by mail.

Although the amendment was approved in the Senate, the bill was “held at the desk” when it was sent to the House. It never made it to the House floor.

Also, the Postal Service has policies designed to minimize the influence of politics. It is overseen by a board of governors (much like a for-profit company’s board of directors) and the postmaster general. Governors “are appointed by the President with the advice and consent of the Senate” and serve seven-year terms (see page 52 of a report on the agency’s history). Only five of the nine governors at any time can be members of the same political party. The board of governors is responsible for appointing the postmaster general and “sets policies on all postal matters.” Governors may be removed only for cause.

The email also claims that CBRE Group receives a 6 percent commission “on each and every one” of the Postal Service properties it sells. That is inaccurate. According to Brennan, “the rate of commission varies by the value of the transaction based on a scaled fee structure.” Both commission amounts and the fee structure upon which they are based are confidential, so we do not know how much the company will receive in sales commissions.

Also, the Postal Service is not funded by taxpayers, although the email refers to it as a “taxpayer funded enterprise.” The Postal Service is “required by law to cover [its own] costs,” although this has not always been the case. It stopped receiving taxpayer funds in the early 1980s as a result of the Postal Reorganization Act of 1970.

It is accurate to say that buildings built before the early 1980s were purchased in part with taxpayer money. However, it is incorrect to say — as the email does — that every Postal Service property now on the market was “purchased with U.S. taxpayers’ dollars.” Of the 25 properties listed as of June 20 with their year of construction, eight were built after the Postal Service became responsible for covering its own costs.

The email also implies that the Postal Service does not need to sell these properties. However, the volume of mail sent through the Postal Service has been steadily declining since peaking in fiscal 2006, hurting the agency’s bottom line and leaving an infrastructure that is “simply too large,” as Brennan put it.

A 2012 report by the Senate Committee on Homeland Security and Governmental Affairs said the Postal Service handled 168 billion pieces of mail in fiscal 2011 — down 21 percent from a peak of more than 213 billion in fiscal 2006. By the spring of 2012, the Postal Service was losing an estimated $25 million a day, according to the Senate committee.

The Postal Service has combated its financial problems in several ways, including raising postage prices and selling off post office buildings and property. The properties currently for sale were chosen because they were “no longer operationally required” or had “significant excess space,” Brennan said.

It is true that the Postal Service does not pay property taxes on the buildings it owns. However, paying the bills on space your business no longer needs is simply bad practice. In addition to saving on heating and electricity, the Postal Service stands to save money on maintenance and landscaping costs associated with these properties. Brennan could not provide us with an estimated cost savings.

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Fact Checker columns by Mark Robison are rated on a scale from 0 to 10, with 10 being absolutely true with no gray area, 5 being down the middle with good points by both sides, 1 being false with no gray area and 0 being intentionally, maliciously or foolishly false.

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